Time Magazine 2010 Annual Report Download - page 55

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Cash Flows
Cash and equivalents decreased by $1.070 billion, including $24 million of cash used by discontinued
operations, for the year ended December 31, 2010 and increased by $3.651 billion, including $617 million of cash
provided by discontinued operations, for the year ended December 31, 2009. Components of these changes are
discussed below in more detail.
Operating Activities from Continuing Operations
Details of cash provided by operations from continuing operations are as follows (millions):
2010 2009 2008
Years Ended December 31,
Operating Income (Loss) .............................. $ 5,428 $ 4,470 $ (3,044)
Depreciation and amortization .......................... 938 948 1,014
(Gain) loss on operating assets .......................... (70) 33 3
Noncash asset impairments ............................. 20 85 7,213
Net interest payments
(a)
............................... (1,060) (1,082) (1,341)
Net income taxes paid
(b)
............................... (958) (810) (212)
Noncash equity-based compensation ...................... 199 175 192
Domestic pension plan contributions ...................... (26) (43) (395)
Restructuring payments, net of accruals. . . ................. (62) (8) 181
Amounts paid to settle litigation ......................... (250) — —
All other, net, including working capital changes............. (845) (382) 681
Cash provided by operations from continuing operations ....... $ 3,314 $ 3,386 $ 4,292
(a)
Includes interest income received of $26 million, $43 million and $65 million in 2010, 2009 and 2008, respectively.
(b)
Includes income tax refunds received of $90 million, $99 million and $137 million in 2010, 2009 and 2008, respectively, and income tax
sharing payments to TWC of $87 million in 2010 and net income tax sharing receipts from TWC and AOL of $241 million and $342 million
in 2009 and 2008, respectively.
Cash provided by operations from continuing operations decreased to $3.314 billion in 2010 from
$3.386 billion in 2009. The decrease in cash provided by operations from continuing operations was related
primarily to cash used by working capital, amounts paid to settle litigation and higher income taxes paid, partially
offset by an increase in Operating Income. Working capital is subject to wide fluctuations based on the timing of
cash transactions related to production schedules, the acquisition of programming, collection of accounts receivable
and similar items. In 2011, the Company anticipates that cash used by working capital will increase over 2010
primarily due to higher investments in television programming and film production as well as higher cash tax
payments.
Cash provided by operations from continuing operations decreased to $3.386 billion in 2009 from
$4.292 billion in 2008. The decrease in cash provided by operations from continuing operations was related
primarily to an increase in net income taxes paid, an increase in restructuring payments, net of accruals and cash
used by working capital, partially offset by a decline in net interest payments and domestic pension plan
contributions. The Company’s net income tax payments increased in 2009 by $598 million primarily due to
higher taxable income in 2009 and the run-off of tax attributes that benefitted the Company in prior years.
43
TIME WARNER INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION – (Continued)